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Technology Stocks : Compaq
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To: Jerome who wrote (93509)10/29/2001 12:34:20 PM
From: Night Writer  Read Replies (1) of 97611
 
Jerome,
I do some amateur TA. At the risk of you being a TA expert, I will make some amateur comments.

If CPQ trades in a tight range for about eight weeks, it is called building a base. $10 appears to be the current resistance area and $8.85 appears to offer some support. That is my guess at the current trading range. After CPQ trades in this range for weeks, it could break out. That would be a move above $10 on large volume. Large volume would be something like 1 1/2 to twice the average volume. The base is important because it means that ownership has turned over. The new owners are less likely to sell at a loss and more likely to hold the stock. (The range is too tight for most short term traders to trade.) After a break out, $10 would become the new support area and a new resistance area would be established. The new resistance area is determined by older owners getting out and newer owners taking some profits while more new owners and traders buy the break out.

Of course, the opposite could also happen. At that point the current $8.85 support area could become resistance.

Hope I didn't insult you with this burst of amateur TA information. Things are slow this morning and I felt like writing. It also helps me think about the chart a little better when I write about it.

With the DOW and COMPX puking it's guts out this morning I'm looking for CPQ to hold while shorts work over the high fliers and the longs get out. This afternoon could be a different story, but a lot of economic news is coming out this week. The odds are that news isn't going to be good and the shorts may gain control.
NW
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